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Tank fleets see a dramatic rebound

The latest Bulk Transporter Annual Gross Revenue Report shows one of the most dramatic turnarounds ever recorded by the US tank truck industry. Revenues and operating ratios for 2004 improved significantly.

In fact, this was the first time in two decades that no tank truck carrier reported an operating ratio in excess of 99%. However, it will take a few more years like 2004 to fully restore the economic health of the industry.

A variety of factors contributed to the good fortune of the tank truck industry. Topping the list was a robust economy that grew by close to 4%. As the saying goes — A rising tide lifts all boats — and that certainly was true for tank truck carriers last year.

Tank fleets ran flat out keeping up with shipper demand. Chemical shipments rose steadily during 2004 as plant capacity utilization topped 75%. Petroleum shipments were up. On the construction side, demand for cement grew by more than 4%. Truck tonnage overall was up 5.7% in 2004.

Shipment volumes helped tank fleets obtain some of the best rate increases in at least a decade. However, the key factors in the growth rate were shortages of drivers and a major revision in hours of service. These two factors brought a significant reduction in capacity, and rate cutting by shippers virtually came to a halt. Many shippers that fought the rate increases couldn't get trucks.

The positive developments are clearly reflected in Bulk Transporter's 2004 Annual Gross Revenue Report. Most of the carriers participating in this year's report achieved higher revenues and well over 60% improved operating ratios.

Among the Top 10, Quality Distribution Inc headed the list for yet another year. Trimac Transportation Services Inc and Kenan Advantage Group Inc were two and three respectively. Rounding out the Top 10 were Superior Bulk Logistics Inc, Groendyke Transport Inc, Schneider National Bulk Carriers Inc, Enterprise Transportation Co, A&R Transport Inc, Tankstar USA Inc, and The Dewey Corporation (new to the Top 10).

The combined Top 10 revenues of $2.62 billion were a solid improvement over 2003 and accounted for 49.4% of total revenue in the 2004 report. The Top 10 carriers accounted for slightly more (49.6%) of the total in 2003. This would suggest that many smaller carriers experienced a hefty rebound.

The Top 25 carriers had $3.87 billion in revenues, or 73% of the total represented in this report. It was virtually the same percentage as the previous year. The 50 largest carriers had revenues of $4.8 billion, accounting for 91.1% of the total, compared with 93.3% in 2003.

Total 2004 revenues for all 96 carriers in this report were $5,307,134,352. In contrast, the 2003 report consisted of 94 carriers reporting a combined total of $4,834,777,091.

Average revenue in 2004 for these 96 carriers was $54,712,725, up slightly from the average of $51,377,479 for 94 fleets in 2003. The median carrier on the list, the one with an equal number of carriers above and below it, had revenues of $21,876,000. In 2003, the median carrier revenue was $21,263,577.

Operating ratios for both 2004 and 2003 were supplied by 53 of the carriers in this report. Thirty-eight showed improvement over the previous year. The operating ratio represents operating expenses as a percentage of revenue.

While the operating ratio improvement was small for some of the carriers, none reported a ratio of 100% or worse (compared with three in 2003). However, none were below 90%, either. Forty fleets had operating ratios between 95.0% and 99.9%, compared with 46 in 2003. Ratios between 90.0% and 94.9% were reported by 24 companies, up from 16 in 2003.

Tractor revenues were available for a majority of the carriers in this report. These figures give an indication of productivity levels. The average for 2004 was $159,109, a healthy increase from the $151,820 average in 2003.

Six of the Top 10 reported tractor revenues, averaging $174,748. This was a clear improvement over the $160,955 average reported by the Top 10 in 2003.

For yet another year, an East Coast petroleum hauler recorded the highest revenue per tractor — $320,577. The lowest amount ($74,596) came from a chemical fleet in the Southwest.

Average revenue per tractor for 11 petroleum transporters was $147,706, down from the previous year's average of $176,887. Petroleum tractor revenues ranged from the overall high of $320,577 to a low of $81,386.

Eleven chemical haulers accounted for average revenue per tractor of $152,633, down from $163,091 in 2003. Tractor revenue ranged from a high of $222,730 down to $74,596.

Average tractor revenue for seven dry bulk specialists was $159,048, which was close to the industry wide average. The 2004 tractor revenue was down from the 2003 average of $162,973. Tractor revenue ranged from a high of $260,400 to a low of $100,098.

Among seven carriers that concentrate on transporting liquid and dry foods, tractor revenue averaged $155,816, which exceeded the industry average. It was well above the 2003 food fleet average of $124,489 per tractor. The high for the category was $196,190, and the low was $83,542.

Many of the figures here are from preaudited reports, and some may include nonbulk revenues or revenues from subsidiary tank truck carriers. In most cases, the numbers were supplied directly to Bulk Transporter. The staff greatly appreciates the cooperation of all who helped in the preparation of this report.